Australia heads into an uncertain April with the global markets perched on the edge of their seats as a number of key events unfold. From Trump policies in the US, Brexit for the UK, elections in Europe and a weaker commodities demand in China, there’s plenty of pressure on the Aussie dollar this month. Let’s check out some of the key domestic and regional events for the AUD that kick start the month.
April 3: Australian Retail Sales
Retail sales figures are released for the month of March, the previous reading showed an uptick of +0.4% after a shock below zero reading for January. Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall Australian economic activity.
April 4: RBA Interest rate decision & RBA rate statement
The Reserve Bank of Australia is largely expected to keep their key interest rate unchanged at 1.5%.The central bank have cut their interest rates some 300 basis points, starting in November 2011 up until August last year, as the economy transitioned out of the mining investment boom.
The RBA statement will give clues as to the voting panel’s current thoughts. In their previous meeting the panel remained satisfied with the current interest rate, but highlighted that soft inflation figures and below target GDP growth could be a concern going forward.
Should the RBA voting members take an even more dovish tone towards lowering current interest rates the Australian dollar may fall sharply against the US dollar. The FED and the RBA will then have directly opposing stances to monetary policy, as the Federal Reserve is expected to raise interest rates two more times in 2017.
April 13: Australian employment change
The Australian Bureau of Statistics releases the unemployment change for the month of March, the previous month saw a change of –6.4k.
The market will be looking for the March employment figure to move back into positive territory, and away from the possible emergence of a down cycle in employment.
Job creation remains an important indicator of consumer spending and the overall health of the Australian economy.
April 17: Chinese (Q1) Gross Domestic Product & Chinese Industrial production (FEB)
Chinese (YOY) GDP for the first quarter of 2017 is expected to remain above the POBC key target of 5%. The previous quarter grew 6.8%, still well above their soft landing target for the Chinese.
On the same day we also get the release of the Industrial production for the month of February. The previous month’s figure came in at 6.3% and analysts are expecting a 6.21% reading for this latest reading. The Chinese government has been embarking on reforms in their economy, as they continue to cut back on raw materials due to spare capacity in a number of industrial sectors.
The Australian economy has been moving away from over reliance on the Chinese importation of their raw materials; however a sharp downtick in Industrial production may have severe consequences on Australian jobs and GDP figures.
How the AUD/USD Performed Last Month
The Australian dollar has been stronger against the greenback for much of 2017 as commodity currencies maintained good demand.
The Aussie has been unable to advance past the 0.7730 level, it has however been well supported by traders between the 0.7500-0.7650 range.
The 100 day period moving average for the AUD/USD is currently located just above the 0.7500 level and is a key pivot point for the currency.
Key resistance for AUD/USD is currently located at 0.7690 and 0.7730
Key support is currently located at 0.7610 and 0.7500
Risk warning: Forward Rate Agreements, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you understand fully the risks involved and do not invest money you cannot afford to lose. Our group of companies through its subsidiaries is licensed by the Cyprus Securities & Exchange Commission (Easy Forex Trading Ltd- CySEC, License Number 079/07), which has been passported in the European Union through the MiFID Directive and in Australia by ASIC (Easy Markets Pty Ltd -AFS license No. 246566).